Jackson and the Second National Bank

By CynthiaGarcia88

  • The Election of 1832

    Andrew Jackson and Henry Clay were both running against each other during this election. Jackson's main focus was the abolishment of the Second National Bank while Clays was the complete opposite. Just like the 1824 and 1826 elections, the country was divided but Jackson won by an overwhelming majority (219 - 49) with Martin Van Buren as his vice president. Now that Jackson was president he would be able to veto the reestablishment of the bank.

  • Nicholas Biddle's Response

    Biddle was furious with Jackson because he vetoed the recharter bill and took away federal funding from the bank. In response, he ordered the bank to give out fewer loans, causing the economy to slow in 1834 to try and get Jackson to back down. He started to demand loans and credit payments while blaming Jackson for any money difficulties. This only infuriated Jackson more because Biddle abused his power and hurt many innocent people to try and win.

  • Jacksons Removal of Federal Funding

    Jackson removed all of the federal funding for the Second Bank and instead gave them to the state banks, also known as "Pet Banks." He also claimed that the bank would not be receiving deposits after 1 October 1833. This removal caused the bank to fail and an economic crisis.

  • The Whig Party

    Henry Clay, John C. Calhoun, and Daniel Webster formed the Whig Party because of their dislike for Jackson's policies and they felt Jackson was abusing his powers over issues with the National Bank. John Tyler later joined the whigs, even though he was opposed to the national bank because he felt Jackson was abusing his executive power and violating state rights. Some Whigs said that Jackson was acting like a king.

  • Specie Circular (Coinage Act)

    Passed by Andrew Jackson, the act raised the silver-to-gold ratio to 15:1 and it caused the value of paper money to decline drastically. He did not trust the National Bank with paper money. The states were passing out bad loans that were not getting paid. All of these difficulties that arose because of the act led to the Panic of 1837.

  • The Panic of 1837

    This was the first major financial crisis that the nation had ever had. The Secon US Bank officially failed along with others, Inflation was astronomical, unemployment was at its highest, and many businesses went bankrupt. Many southern states because the price of cotton had to be reduced. The panic was followed by a depression that lasted until 1843. This crisis also led to Martin Van Buren's political downfall and it ruined his presidency, even though a lot of the blame was Jacksons.